A Study on the Factors Affecting Intention Using Online Banking Services in Vietnam45303

A Study on the Factors Affecting Intention Using Online Banking Services in Vietnam Le Van Phuc 1* , Do Song Huong 2 , Nguyen Hoang Ngoc Linh 3 1 VNU University of Social Sciences and H

A Study on the Factors Affecting Intention Using

Online Banking Services in Vietnam

Le Van Phuc (1)(*) , Do Song Huong (2) , Nguyen Hoang Ngoc Linh (3)

(1) VNU University of Social Sciences and Humanities, Vietnam National University, Hanoi, Vietnam (2) Graduate School of International Studies, Pusan National University, Pusan, Korea

(3) University of Economics, Hue University, Thua Thien Hue, Vietnam

* Correspondence: levanphuc.hce@gmail.com

Abstract: Online banking services have become a new type of banking service and been used widely

However, there is limited knowledge about consumer behavior in Vietnam because it is a complicated socio-technical phenomenon and involves many factors Therefore, this study aims to analyze the main factors affecting the intention to use online banking services in Vietnam The proposed research model bases on the extension of the TAM model with new factors including Perceived Risk, Brand Image, User Innovativeness, and Government Support Based on valid collection from 356 online banking users, the data processed using SPSS including Descriptive Statistics, Cronbacsh'a Alpha, Exploratory Factor Analysis (EFA) and Regression Analysis The results show that Perceived Usefulness, Perceived Ease of Use, Brand Image, User Innovativeness, and Government Support have a positive impact on customers' intention to use online banking services, while Perceived Risk has a negative influence These results can help online banking service providers implement their user development strategies, as well as become references for related research in the future

Keywords: Commercial banks; intention to use; online banking services; Vietnam; TAM

1 Introduction

Online banking services, which are applied widely all over the world, have become

an essential part of people's life (Katiyar and Badola 2018) Online banking services also play

an important role in the banking industry (Salem et al 2019) On the one hand, online banking services contribute to reducing operating costs including human staff, facilities investment, and transaction cost Besides, online banking services give the manager a chance to boost productivity (Hernando and Nieto 2007) On the other hand, online services provide many kinds of banking services via the Internet (AlKailani 2016), thus, they help to save time and enhance the convenience for users (Vuong and Nguyen 2016) Furthermore, the application of online banking services brings significant benefits such as advancing service quality and widening market which lead to higher bank performance (Tarhini et al 2016)

Over the past few years, more and more banks recognize the advantages of online banking service In 1995, there was only one bank providing online banking services, but by the end of 2002, 6000 banks were applying online services (Claessens et al 2013) Based on global statistics, the number of mobile banking users, a form of online banking, exceeded

1.8 billion people, and 34% of retailed banking conducted through online services (UBS Evidence Lab 2015)

Vietnam, with a young and dynamic population structure, is favorable for the formation and development of internet banking The percentage of people using smartphones in urban areas is 84%, in rural areas is 68% (Neilsen 2017) Until 2015, about 45 banks are providing online banking services namely SMS banking, internet banking, and 32 banks develop mobile banking apps (Q&Me 2015) It is worth noting that Vietnam has a potentiality to develop online banking

There is a growing body of literature that recognizes the importance of online banking services More specifically, many pieces of research have been conducted in developing and emerging countries such as Palestine (Salem et al 2019), Pakistan (Hassan and Awan 2017), India (Marakarkandy et al 2017; Kumar and Madhumohan 2014), Tunisia (Ben Mansour 2016) Besides, there are several studies carried out in developed countries e.g Greece (Giovanis et al 2012), Finland (Pikkarainen et al 2004), Australia (Sathye 1999) Notably, most of the studies on the acceptability of online banking services took the TAM model as an analytical basis However in this study, we use the extended TAM model by adding more relevant factors

In Vietnam, though online banking services have made significant progress recently, few studies are discussing this issue comprehensively Most of the current studies focus on online banking services of individual bank (Nguyen 2019) or target on a specific customer group (Nguyen et al 2014) or even based on a small sample size (Chong et al 2010)

The objective of this study was to explore factors affecting the intention to use online banking services in Vietnam, which provides a more comprehensive view of the research topic From that, the paper proposes some solutions related to improving the quality of online banking services and implication regarding macro administration policy

The remainder of the paper proceeds as follows Section 2 reviews the relevant literature and presents the main hypotheses; section 3 describes the dataset, variables and highlights the econometric model; section 4 presents the main empirical results; section 5 details the discussion while section 6 shows conclusion, limitations, and future research

2 Literature Review

2.1 Technology Acceptance Model (TAM)

The technology acceptance model (TAM) is proposed by Davis et al (1989) to predict the main factors that determine consumers’ intention for using any new technology (Salem

et al 2019; Cham et al 2018; Bailey et al 2017) in many fields such as internet banking, mobile banking, telephone banking services (Patel et al 2018; Martins et al 2014; Abbad 2013; Yang and Zhou 2011), social network (Kim 2012), digital library (Chen et al 2016; Kapoor et al 2014); and other business-related fields based on information technology platforms (Demoulin and Djelassi 2016)

The TAM model supposes that the intention to utilize technology determined by Perceived usefulness (PU) and Perceived ease of use (PEOU) (Abdinoor and Mbamba 2017) Perceived usefulness related to the level that the application of a specific technology will improve customers’ performance (Davis et al 1989), while Perceived ease of use explains the degree which needs little physical and mental effort for users to use a system or technology (Al Khasawneh 2015) These factors are all linked to Attitudes Toward Using in online banking services (Salem et al 2019)

Recent studies, using TAM model as a theoretical framework, have proposed to remove Attitude Towards Using from the model, because Perceived usefulness and Perceived ease of use impact directly on Behavioral intention to use, which is similar to initial anticipation (Koufaris 2002; Patel, 2018) Also, Venkatesh et al (2003) show that Attitude towards using have no impact on the close relationship between Perceived usefulness and Behavioral intention to use In the same vein, many other studies (E.g: Subramanian 1994; Keil et al 1995; Chau 1996; Jackson et al 1997; Igbaria et al 1997; Venkatesh and Davis 2000; Legris et al 2003; Patel et al 2018) have eliminated Attitude towards using from their research model Therefore, in our research, the TAM model assumes that Behavioral Intention to use is directly affected by only Perceived usefulness and Perceived Ease of use

Figure 1: Technology Acceptance Model (TAM) (Source: Davis et al 1989)

2.2 Hypotheses Development for the Proposed Model

With theoretical and empirical confirmation, TAM has been acknowledged as the base model for technology products, including online banking services TAM consistently explains a significant amount of variance in usage intention and behavior The TAM seems

to be not only a powerful model for showing the determinants of system utilization but also

a valuable tool for system planning

However, the TAM model has limitations in giving a comprehensive explanation of which factors affecting intention to use technology services (Salem et al 2019; Patel et al 2018; Chen et al 2007) To overcome this weakness, many studies such as Baabdullah et al (2019), Chua et al (2019), Cham et al (2018), Patel et al (2018), Koksal (2016), Akturan and Tezcan (2012), Chong et al (2010) have extended the TAM model by incorporating or adding variables to improve the effectiveness and interpretation of the model Based on that, in this study, we add more extensions to the original TAM model to have a comprehensive assessment of factors affecting the intention of customers to use online banking services

2.2.1 Perceived usefulness (PU)

Perceived usefulness, making users believe that technology will improve work performance, is a crucial factor of the TAM model (Davis 1989) Perceived usefulness as the extent to which a person believes that using technology will increase his or her performance

In other words, it is the degree of belief of each individual that online banking service is more advantageous than tradition banking services (Chong et al 2010) It means that users will accept online banking services, which can reduce time and improve efficiency

Based on 29 studies carried out from 1992 to 2003, Jeyaraj et al (2006) pointed out that most of the research proved Perceived usefulness having a significant impact on Intention to use technology Similarly, numerous empirical studies show a strong positive relation between these two factors in online banking services sector (Chang et al 2018; Lim

et al 2018; Chuang et al 2016; Lee 2016; Masinge 2010; Crabbe et al 2009; Celik 2008; Gounaris and Koritos 2008; Pikkarainen et al 2004) Perceived usefulness is an important indicator of technology acceptance The more useful the technology seems to be, the more likely that the technology is used Hence, the above discussion leads to our first hypothesis:

H1: Perceived usefulness has a positive relationship with the intention to use Online

banking services

2.2.2 Perceived ease of use (PEOU)

According to Davis et al (1989), Perceived ease of use is the degree to which a person believes that using a system or technology will be free of effort Perceived ease of use also refers to the level of the relaxation of customers in the process of learning how to use online banking services (Patel et al 2018) Hence, the more perceived ease of use of an application, the more likely to be accepted by users (Pikkarainen et al 2004) Following the same line, Gounaris and Koritos (2008) note that the ease of use also boosts the customers’ intention of using online banking services Riquelme and Rios (2010) concluded that users tend to accept using online banking services in case they are convenient, user-friendly, and easy to operate

In addition, many studies have shown a significant positive correlation between Perceived ease of use and intention to use technology services, such as online banking (Patel

et al 2018; Chong et al 2010; Szopiński 2016; Abbad et al 2013; Wang et al 2003), mobile payments (Chang et al 2018), fin-tech services (Hu et al 2019; Chuang et al 2016), mobile banking (Akturan and Tezcan 2012; Koksal 2016) Thus, the second hypothesis states as follow:

H2: Users’ perceived ease of use has a positive impact on their intention related to

using banking online services

2.2.3 Brand image

Brand image is a set of beliefs and impressions of customers about a particular brand (Kotler and Armstrong 1996) Brand image is also an intangible asset, which is an essential part for brands to distinguish their products from competitors (Aaker 1996; Kapferer 1992)

Specifically, a brand image is the perception of the brand in the mind of customers (Harsandaldeep et al 2019)

It is worth noting that users must provide personal information to use online banking services Thus, a good brand can enhance the trust of customers (Semuel et al 2014; Lee et al 2009) Brand image acts firstly as a guarantee for online banking services, secondly

as contribution to the strong relationship between businesses and users, thirdly as an improvement of users’ awareness and satisfaction (Saleem and Rashid 2011), and finally as

a factor affecting the intention to use technology services (Siamagka et al 2015) Several lines

of evidence suggest that brand image has a positive impact on the intention to accept technology services (Hu et al 2019; Do et al 2017; Siamagka et al 2015) Hence, the above discussion leads to our hypothesis:

H3: Brand image has a positive influence on intention related to using banking

online services

2.2.4 User innovativeness (UI)

User innovativeness is defined as the level of acceptance of each individual in trying new technology, new products, or new service (Hu et al 2019) It is conceptualized as the degree and speed of innovation adoption by an individual In fact, a level of users’ innovativeness reflects their interest in a new field When an individual has a high level of innovativeness, he will be more motivated to changes in technology (Leicht et al 2018)

Many recent studies have shown that in field of technology, the level of innovation

of users has a positive influence on the intention to use technology services (Zhang and Kizildag 2018; Glodsmith 2002; Wood and Swait 2002; Hirunyawipada and Paswan 2006;

Lu et al 2005) Commenting on this relationship, Kim et al (2010) argue that, in general, user innovativeness plays a critical role in the intention to use technology due to the lack of mobile payment services knowledge This leads to the following hypothesis:

H4: User innovativeness has a positive influence on the intention to use banking

online services

2.2.5 Perceived risk (PR)

Perceived risk is a construct that measures the uncertainty regarding possible negative consequences More specifically, perceived risk related to users' thoughts and beliefs about the possibility of receiving negative results in online transaction services (Kim

et al 2008) In other words, it means the lack of trust affects negatively to the intention to use technology (Littler and Melanthiou 2006)

Normally, financial risks and privacy risk are the two common types of risk in online banking services (Patel et al 2018) The former related to property damage caused by users

or stakeholders, the latter refers to the loss of personal data, transaction data, and other information (Hu et al 2019) There is a large number of published studies (e.g: Hu et al 2019; Khedmatgozar et al 2017; Marakarkandy et al 2017; Littler and Melanthiou 2006)

believe that perceived risk affects negatively the intention to use technology services Therefore, our hypothesis will be:

H5: Perceived risk has a negative impact on intention to use online banking services

2.2.6 Government Support (GS)

Government support can be seen through the investment in infrastructure including internet bandwidth, legislation (Chong et al 2010), and the encouragement to develop e-commerce (Jaruwachirathanakul and Fink 2005) The study of Chong and Ooi (2008) shows that governmental investment in information infrastructure in Singapore, Japan and Malaysia is the main drivers of developing online banking services In Vietnam, cash is still the main payment method, therefore, the government strongly encourage citizens to use online banking services (Chong et al 2010) So, it is clear that government support has a significant positive effect on the intention to use online banking services (Tan and Teo 2000; Chong et al 2010) Therefore, the hypothesis is that:

H6: Government support has a positive impact on the intention to use online

banking services

The proposed research model in this study based on TAM model (Davis et al 1989) and then edited to harmonize the economic environment in Vietnam Figure 1 shows the research model and hypotheses This study examines the impact of Perceived Usefulness, Perceived Ease of Use, Brand image, User innovativeness, Perceived Risk, and Government support on Intention to use online banking services in Vietnam, a frontier country

Figure 1 Proposed research model

3 Research Methodology

3.1 Data Collection

This study aims to analyze the main factors affecting the intention to use Online banking services in Vietnam According to Hair et al (2010), the sample size for factor

Government Support (GS)

Perceived Usefulness (PU)

Perceived Ease of Use (PEOU)

Brand Image (BI) User Innovativeness (UI)

Perceived Risk (PR)

Intention To Use Online

Banking Services (ITU)

H1 + H2 + H3 +

H4 + H5 - H6 +

analysis should be at least 100 or five-fold the number of observations Thus, with the 23 initial variables, the minimum sample size should be 115

Data collected through an internet survey The only standard for joining this survey

is that the participant is also the user of Online banking service After omitting the inappropriate response, the study obtained 359 (71.8%) responses

Descriptive statistical results on demographic characteristics of 359 participants show in Table 1 The results indicate that 57.1% and 42.9% of respondents are male and female respectively The majority of participants (39.6%) are from 26 to 35 years old This is reasonable because people in this range of age normally have a relatively high-level acceptance of new technology

Besides, it can be seen that the office worker (40.4%) is the most popular job, followed

by managers and students at 16.4% and 15.9%, respectively Regarding the monthly income, 29.8% of respondents have a monthly income from 5 million to under 10 million VND, and only 1.4% of them have an income of over 25 million VND per month About the academic level, most of the online banking users obtain bachelor's degrees (40.9%), following by college (29%), high school (17.3%) and higher education (12.8%) Regarding forms of online banking services, electronic transfer and electronic bill payment are most frequently used at 88.6% and 66.9%, respectively Moreover, 34.5% of respondents have used online banking services from 1 year to less than 2 years which means that they have a quite long time to experience these services

Table 1 Descriptive Statistics of the data (N = 359)

Demographic Variable and Category Frequency Percentage

Age

Job

Monthly income

> 25 million VND 5 1.4

Academic level

Forms of online

banking services

Length of using

online banking

services

3.2 Instrument Development

The design of the survey based on relevant research models and measurement scales, then revised by the group of authors Table 2 shows the measurement scale of this study

Factor PU is built up from the study of Akturan & Tezcan (2012) and Sharma & Srikrishna (2014) Similarly, factor PEOU is revised from Akturan & Tezcan (2012) and Zhang & Kizildag (2018) Based mainly on Hu et al (2019), we construct BI factor PR and ITU are synthesized from Marakarkandy et al (2017) and Akturan & Tezcan (2012), Sharma

& Srikrishna (2014), Marakarkandy et al (2017)

The collected quantitative data will be processed by SPSS 22.0 to check the reliability

of the scale via Cronbach’s Alpha coefficient, then conduct exploratory factor analysis (EFA) and multiple linear regression

Table 2 Measurement instruments

Perceived Usefulness (PU) PU1 I think that using online banking would enable me to accomplish

my tasks more quickly

Akturan and Tezcan (2012); Sharma and Srikrishna (2014)

PU2 I think that using online banking would make it easier for me to

carry out my tasks

PU4 Online banking helps me to manage banking activities better

PU5 Overall, I think that using online banking is advantageous

Perceived Ease of Use (PEOU) PEOU1 I think that learning to use online banking would be easy Akturan and Tezcan

(2012); Zhang and Kizildag (2018)

PEOU2 I think that learning to use online banking does not require a lot of

mental effort

PEOU3 It is easy for me to become skillful at using my devices to facilitate

banking services

Brand Image (BI) BI1 I think I prefer to accept the services provided by familiar brands

Hu et al (2019)

BI3 I trust the bank brand that I am using or planning to use

User Innovativeness (UI) UI1 If I heard about new information technology, I would look for ways

to experiment with it

Zhang and Kizildag (2018); Lu et al (2005)

UI2 Among my peers, I am usually the first to explore new information

technologies

UI3 I like to experiment with new information technologies

Perceived Risk (PR) PR1 I believe that money can easily be stolen while using online banking

Marakarkandy et al (2017); Akturan and Tezcan (2012)

PR2 I think that there would be problems with my financial

transactions while using online banking

PR3 Overall, I feel online banking is risky

Government Support (GS) GS1 Government of Vietnam supports and promotes usage of the

internet and e-commerce

Tan and Teo (2000); Marakarkandy et al (2017)

GS2

Government of Vietnam is active in setting up facilities such as

providing adequate telecommunication facilities, which will be an

enabler of online banking

GS3 Government of Vietnam has framed good regulations and laws for

Information Technology use

Intention To Use (ITU) IT1 I will be using online banking in the future regularly Sharma and Srikrishna

(2014); Marakarkandy

et al (2017)

IT2 I will recommend peers to use online banking

IT3 I have the intention to use online banking in the future

4 Results

4.1 Reliability analysis

Cronbach’s Alpha coefficients, which show the consistency of the scale, is often used

to determine the reliability of collected data In their research, Nunnally (1967) and Hair et

al (2010) suggested that the Cronbach’s Alpha coefficient should be greater than 0.7

Table 3 Results of reliability analysis

Perceived Risk (PR) 3 0.853

From table 3, it can easily see that most of Cronbach’s Alpha coefficients are larger than 0.7 In particularly, Cronbach’s Alpha coefficients of BI, PR, GS, and PU are 0,859; 0,853; 0,822, and 0,818 respectively Therefore, the scale and collected data in this study ensure the reliability of the following analysis

4.2 Exploratory Factor Analysis (EFA)

To evaluate the validity of the scale, the exploratory factor analysis (EFA) and the Principal Component Analysis method with Varimax rotation, which is the most commonly used method with the unidirectional concept (Chong et al 2010), are applied in this study

Table 4 KMO and Bartlett’s tests

Kaiser-Meyer-Olkin Measure of Sampling Adequacy 0.774 Bartlett's Test of Sphericity Approximate chi-square 3284.007

As can be seen from table 4, the KMO test value is 0.774, meaning that the items within each factor are adequate for grouping The results of Bartlett’s test indicate probability or significance value is 0.000, that means the variables are adequately correlated and accommodates an acceptable basis for factor analysis

Table 5 Results of principal components analysis